The difference between the willingness to sell a good and the price a producer receives is also known as:
A) producer profit.
B) producer surplus.
C) consumer waste.
D) revenue.
E) producer benefit.

Question

Quizplus · Accepted Answer

Producer surplus is the difference between the market price of a good and the willingness of the producer to sell it. It represents the benefit that a producer receives from selling a good at a higher price than they would be willing to. Therefore, option B is the correct answer. Option A, producer profit, is the total revenue minus the total cost of production. Option C, consumer waste, refers to the cost that consumers incur when a good is overpriced or of low quality. Option D, revenue, is the total amount a producer receives from selling a good or service. Option E, producer benefit, is a vague term and is not a commonly used economic concept.

The Difference Between the Willingness to Sell a Good and the Price